Cell C franchisees up in arms

2010-03-05 16:00

David McKay & Simon Dingle

Johannesburg - Anger is growing among franchise owners of Cell C stores, who claim the cellular telecommunications firm has not been transparent in its decision to restructure its national stores network.

"No real reason has been given to we agents," said an anonymous caller to Fin24.com offices in Johannesburg on Friday. "I am one of the best agents in Gauteng and I have been instructed that the store will be closed and handed over to one person who will be responsible for the whole region."

The source spoke under anonymity in terms of a contract signed with Cell C, which told franchisees they were forbidden to speak to the media, other agents, or employees within the company about internal matters such as store operation.

Cell C was well within its legal rights, the source said, but the decision to reclaim its stores and centralise their management with a third party appears to have been poorly communicated.

Franchisees were provided with a 60-day notice and compensation equal to the fees paid by them to Cell C for controlling the store.

"You can be closed down for committing fraud or failing to pay rent, but ... taking the store back seems morally wrong," the franchisee said.

Cell C told Fin24.com on Tuesday it was restructuring what it termed its reseller stores in an effort to improve economies of scale.

But Reichelt refused to be drawn on the franchise holder's complaints. On Friday he said: "Cell C's contractual undertakings with franchisees is not a matter for public debate."